Global indices edge lower on China’s sluggish GDP growth

What’s Up

♦ Shoppers spent at US retailers more than expected

♦ Economic growth may also give inflation more fuel

♦ It’ll prompt the Fed to keep interest rates high to suffocate it

♦ Such a move would hurt equity prices and other investments

♦ Treasury yields in the bond market rising

Bangkok: Markets fell in Europe and Asia after China reported on Wednesday that its economy grew at a 4.9 per cent annual pace in July-September, down from 6.3 per cent in the previous quarter. Oil prices jumped more than $1. Germany’s DAX was unchanged at 15,253.87 while the CAC 40 in Paris also was virtually flat at 7,028.83. Britain’s FTSE 199 fell 0.2 per cent to 7,656.76 as the government reported that inflation held steady at 6.7 per cent in September as easing food and drink price rises were offset by higher fuel costs. The future for the S&P-500 lost 0.2 per cent and that for the Dow Jones Industrial Average was 0.1 per cent lower.

China’s National Bureau of Statistics said the world’s second-largest economy slowed in the summer as global demand for exports faltered and the ailing property sector sank deeper into crisis. The Chinese government has acted to help the economy with various policies, raising spending on building ports and other infrastructure, cutting interest rates and easing curbs on home-buying. But economists say wider reforms are needed to address longer-term problems, such as a fast-aging population and falling productivity, that are hindering growth. Weak global demand and the property industry remain the biggest shadows overhanging the economy in the near term, economists said.

“The wider data on the property sector remained weak, although green shoots are appearing,” Capital Economics said in a report. “New housing starts continued to drop and are now at their lowest levels since 2005,” it said.

Hong Kong’s Hang Seng shed 0.1 per cent to 17,756.02 and the Shanghai Composite index dropped 0.8 per cent to 3,058.71. The Nikkei 225 in Tokyo closed flat, gaining less than 2 points to 32,042.25. South Korea’s Kospi added 0.1 per cent to 2,462.60 and Australia’s S and P/ASX 200 advanced 0.3 per cent to 7,077.60. Bangkok’s SET rose 0.5 per cent and India’s Sensex skidded 0.7 per cent. On Tuesday, the S&P 500 edged down less than 1 point to 4,373.20. The Dow Jones Industrial Average added less than 0.1 per cent, to 33,997.65, and the Nasdaq composite fell 0.3 per cent, to 13,533.75.

A report on Tuesday showed shoppers spent more at US retailers last month than economists expected.